The social media platform X, formerly known as Twitter, continues to navigate a challenging landscape marked by a sustained decline in its European Union user base and a precipitous drop in global advertising revenue. According to its latest Digital Services Act (DSA) disclosure report for the first half of 2026, X reported a further reduction in active users within the EU, reinforcing a trend observed since late 2023. This internal data is corroborated by external analytics firms, which point to a broader contraction of X’s global audience, directly contrasting with repeated claims from owner Elon Musk and company executives about record engagement. Simultaneously, financial disclosures reveal an alarming 70% decrease in ad revenue compared to the period preceding Musk’s acquisition, casting a long shadow over the platform’s traditional business model and its ambitious transformation into an "everything app."
The Digital Services Act and X’s EU Performance
Under the stringent regulations of the European Union’s Digital Services Act, enacted to foster a safer and more accountable online environment, Very Large Online Platforms (VLOPs) like X are mandated to publish biannual transparency reports. These reports offer crucial insights into various operational aspects, including user counts, content moderation efforts, staffing levels dedicated to moderation, and the volume of government information requests. The DSA, which fully came into force for VLOPs in August 2023, aims to tackle illegal content, protect users’ fundamental rights, and increase algorithmic transparency. X’s compliance with these requirements provides a rare window into its performance, particularly in a region known for its robust regulatory oversight.
The latest DSA report from X indicates a continuation of user attrition within the EU. While the specific drops in this most recent update are described as "slight," they are part of a larger, more concerning pattern. X’s EU user count has been on a downward trajectory since November 2023, roughly a year after Elon Musk finalized his tumultuous acquisition of Twitter in October 2022. This period immediately following the takeover saw a brief surge in user interest, with X’s EU active user count reportedly rising again in the first half of 2025, as per a report released in October 2025. However, this rebound proved fleeting. The second half of 2025 witnessed a significant dip of approximately 15% in X usage across the EU, a level that has largely persisted into the first half of 2026. This consistent decline directly undermines the narrative frequently propagated by Musk and his team, who have consistently asserted that the platform is experiencing unprecedented levels of activity and interest.
Global User Base: A Tale of Two Numbers
The EU-specific data, while confined to a particular geographic region, aligns with broader external analyses suggesting a shrinking global user base for X. Independent analytics firms provide a different picture from X’s internal proclamations. For instance, recent figures shared by SimilarWeb and reported by TechCrunch indicate a substantial decline in X’s monthly active users (MAU) this year. According to SimilarWeb’s estimates, which primarily track app store activity and mobile usage, X had approximately 302 million mobile active users in June 2026. Its daily active user (DAU) count stood at 123.7 million during the same period.
It is important to acknowledge that third-party estimates like those from SimilarWeb may not capture the entire user base, as they often have limitations in tracking web usage comprehensively. However, these figures are generally considered indicative of broader market trends and often provide a more objective perspective than internal company statements, especially from privately held entities. The disparity between these external estimates and X’s self-reported figures is stark. In May 2026, as part of a prospective filing related to SpaceX, X claimed a global figure of 550 million monthly active users. Given that historically, around 85% of X’s users accessed the platform via mobile devices, a discrepancy of roughly 250 million users between SimilarWeb’s mobile-only estimate and X’s total MAU figure is significant and difficult to reconcile solely by accounting for web usage. Even if SimilarWeb’s numbers are somewhat lower than the actual totals due to tracking limitations, the substantial gap strongly supports the trend identified in X’s DSA reports: the platform is indeed losing its audience over time.
Financial Hemorrhage: The Advertising Exodus
Beyond user engagement, X’s financial health, particularly its advertising revenue, appears to be in a precarious state. Recent financial insights, notably contained within SpaceX’s Q2 2026 performance update published on August 4, provide a stark illustration of the platform’s revenue struggles. In the second quarter of 2026, X generated a mere $367 million in ad revenue, contributing to a cumulative ad intake of $710 million for the first half of the year.
This represents a significant year-over-year decline of $160 million compared to the first half of 2025, marking an 18.4% dip. The gravity of this situation becomes even clearer when contrasted with the period before Elon Musk’s takeover. In the first half of 2022, the last full reporting period prior to the acquisition, Twitter posted approximately $2.2 billion in ad revenue. Specifically, the first quarter of 2022 saw Twitter bring in $1.2 billion in total revenue and $1.11 billion in ad revenue. This means that X’s ad revenue plummeted by roughly 70% between the first half of 2022 and the first half of 2026.
This dramatic decline is not coincidental. It directly reflects the profound impact of Musk’s changes on the platform’s business operations and advertiser relations. Following the acquisition, Musk initiated a series of controversial policy shifts, mass layoffs that decimated content moderation and trust-and-safety teams, and frequently engaged in public statements that alienated advertisers. Concerns over brand safety escalated as the platform struggled with a perceived surge in hate speech, misinformation, and the proliferation of impersonator accounts following the introduction of paid verification without robust identity checks. Major advertisers, including prominent brands from the automotive, pharmaceutical, and consumer goods sectors, either significantly reduced their spending or completely withdrew their campaigns, citing brand safety concerns and a lack of confidence in the platform’s direction. This advertiser exodus has fundamentally crippled X’s primary revenue stream.
Unfulfilled Projections and the Subscription Gamble
The current financial reality stands in stark contrast to the audacious projections Elon Musk presented during his initial pitch to investors. According to reports from The New York Times, Musk had envisioned X generating a staggering $12 billion in ad revenue by 2028. Furthermore, he projected an aggressive growth in paid subscriptions, aiming for 69 million paying subscribers by 2025, which he expected to surge to 159 million by 2028.
While SpaceX’s filings have not provided specific data on X’s subscriber counts, a statement in February from X’s now-former Head of Product, Nikita Bier, offered a glimpse into this new revenue stream. Bier claimed the platform had reached $1 billion in annual revenue from subscriptions. Assuming an average price of $8 per month for an X Premium subscription – a midpoint between the $3 Basic tier and the $40 Premium+ tier – this annual run rate would suggest approximately 10.4 million paying users. When juxtaposed against X’s self-reported 550 million monthly active users, this translates to a mere 1.9% of its total audience opting for a paid subscription. This penetration rate is significantly lower than Musk’s initial projections and highlights the inherent challenge of converting a massive, historically free user base into paying customers, especially amidst widespread dissatisfaction and user attrition.
The "Everything App" and xAI’s Strategic Role
Despite the evident struggles in traditional metrics of user engagement and advertising revenue, X’s future under Elon Musk is increasingly viewed through a different strategic lens. Musk’s overarching vision for X is to transform it into an "everything app," a comprehensive digital platform that integrates social networking, messaging, payments, and a myriad of other services, akin to WeChat in China. In this grand scheme, X is no longer merely a standalone social media platform; it is a critical component of a broader ecosystem that includes SpaceX, Tesla, Neuralink, and most notably, xAI, Musk’s artificial intelligence venture.
X provides an indispensable data stream for xAI, feeding its large language models, such as Grok, with a vast and continuously updated repository of human communication, trends, and public sentiment. The millions of posts, interactions, and data points generated on X are crucial for training and refining xAI’s models, offering a real-time reflection of global discourse. This strategic integration implies that X’s internal value to Musk’s conglomerate might now transcend its direct revenue generation from advertising and subscriptions. If xAI successfully develops into a highly profitable business, leveraging X’s data, the pressure on X itself to be a self-sustaining financial powerhouse through conventional means could diminish. In this scenario, X’s primary function might evolve into a data utility for the AI enterprise, rather than a standalone media company.
However, the precise details of Musk’s long-term "grand plans" remain largely opaque, often communicated through ambitious, futuristic pronouncements involving moonbases, humanoid robots, and orbital data centers. While the interconnectedness of his ventures is clear in his mind, the practical execution and financial viability of each component, especially X, are still subject to intense scrutiny. Even within this new paradigm, X would presumably need to maintain a sufficiently large and active audience to ensure a robust and relevant data flow for xAI’s models. A continuously shrinking user base could eventually degrade the quality and representativeness of the data, potentially undermining xAI’s effectiveness.
Broader Implications and Future Outlook
The persistent declines in X’s user base and revenue have significant implications not only for the platform itself but also for the broader social media landscape and digital regulation. The exodus of users has fueled the growth of alternative platforms such as Threads, Bluesky, and Mastodon, offering users new digital public squares, albeit none have yet fully replicated Twitter’s historical ubiquity.
For advertisers, the ongoing uncertainty surrounding brand safety and audience reach on X continues to be a major deterrent, pushing marketing budgets towards platforms perceived as more stable and reliable. This shift could have lasting effects on the digital advertising ecosystem. Furthermore, X’s struggles with content moderation, particularly under a leaner staff and evolving policies, continue to attract intense scrutiny from regulators, especially in the EU. Non-compliance with DSA obligations or a perceived failure to adequately address illegal content and disinformation could lead to substantial fines and further operational restrictions.
Ultimately, X’s journey under Elon Musk represents a daring and controversial experiment in platform transformation. Can a once-dominant social media platform fundamentally alter its business model, alienate a significant portion of its traditional user and advertiser base, and still emerge as a viable, integral part of a larger, futuristic technological empire? The data from the EU and the global financial reports suggest a formidable uphill battle. While the strategic integration with xAI offers a potential lifeline and a redefined purpose, the question of whether X can sustain a large enough, engaged audience to fuel Musk’s ambitious vision remains an open and critical one. The coming years will reveal whether Musk’s unconventional approach can defy conventional economic and user engagement trends, or if X’s decline is an irreversible consequence of its radical metamorphosis.
